), the supplier of industrial, medical and specialty gases, and
hardgoods has acquired the assets and operations of Team Welding,
Ltd. which operates under the trade name of Technical Alloy &
Industrial Gas. Financial terms of the transaction were not
Headquartered in Houston, TX, Technical Alloy, founded in May 2001,
is the provider of one-stop welding supply, which designs and built
complete custom welding systems. Technical Alloy generated around
$20 million sales in 2013.
The acquisition is in line with Airgas's strategic efforts to
develop through organic growth. As per the buyout Airgas will add
Technical Alloy and its 38 associates to the Gulf Coast region. The
acquisition will help Airgas strengthen its competitive position
and will provide it with an opportunity to expand its presence in
the Houston area.
Airgas reported 2% year-over-year sales increase in fiscal 2014
mainly driven by acquisitions. Since the beginning of its fiscal
year, Airgas has acquired 11 businesses with aggregate annual
revenues of nearly $82 million.
On March 4, Airgas announced the buyout of Welding & Therapy
Service, Inc., an industrial and medical gas and welding supply
distributor with five locations in Indiana and Kentucky.
Airgas looks forward to continually enhance integrated product and
service offering to customers through acquisitions of both core and
adjacent product and service businesses in the future.
Airgas' takeovers are in line with its strong balance sheet
position. The company reported record free cash flow in fiscal 2014
and also marked a 48% year over year rise to $441 million. Its
long-term debt decreased to $1.70 billion as of March 31, 2014,
from $2.3 billion as of March 31, 2013. These factors also drove
Airgas to authorize share repurchase, dividend payment and issuance
On June 12, Airgas unveiled the pricing of $300 million worth of
3.65% Senior Notes due July 15, 2024, which is in accordance with
its strong balance sheet position. Depending on customary closing
conditions, the settlement date for the offer is June 17, 2014. The
net proceeds from this issue will be used for general corporate
purposes including funding acquisitions and repayment of debt.
The book-running managers for this offering are the Goldman, Sachs
& Co. - a wing of
The Goldman Sachs Group, Inc.
). Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells
Fargo Securities, LLC, - a unit of
Wells Fargo & Company
In addition, Moody's Investors Service -- the rating unit of
) assigned a Baa2 rating to Airgas' long-term debt. While Standard
and Poor's Corporation provided a BBB rating for the same.
For fiscal 2015, Airgas expects earnings per share in the range of
$5.00 to $5.20, representing a 6% to 10% year-over-year rise. The
guidance includes 11-16 cents per share of negative year-over-year
impact from variable compensation reset following a below-budget
year. Airgas expects its refrigerants business to make a slightly
favorable contribution to its year-over-year earnings per share
growth in fiscal 2015.
Although the recently started nonresidential construction projects
will be beneficial for Airgas in the near term, its railcar
production is still being weighed down by weakness in mining and
Radnor, PA-based Airgas through its subsidiaries, distributes gases
as a well as hardgoods to diverse businesses in the U.S. The
company also markets its products and services through e-business,
catalog and telesales channels.
Airgas currently has a Zacks Rank #4 (Sell).
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